Carlton Polish Co. Harvard Case Solution & Analysis

Solution 4

What can you say about the balance sheet?

As per changes in the balance sheet with respect to the changes in financial statement, the analysis is giving a high gearing signal, which shows that the company's liquidity position is not good. The balance sheet is using the approach of estimating “future forecasted results” in the implementation of further analysis. The company makes sure that certain criteria which will be feasible in all features are not changed: assumption that has led to the prediction of certain future event, since the future is uncertain and the company has certain backups are ready to support.

Solution 5

The pro-forms are not reasonable to justify because there is some mistake in the case which is identified with the actual operating income of 1982. Other things are going good according to the forecasted assumption. Reasons for justifying is that, it follows the practical market approach which the organization is doing on a daily basis; which are always going in favorable mode.

Solution 6

The reasonable discounted rate used in the analysis given in the Appendix C, showing their effectiveness with its relevant assumptions, which are already given in the analysis heading and annexed in the excel file. The rate used is 9% WACC, which means the weighted average cost of capital.

Solution 7

Reasonable estimation for calculating the worth of the company is “discounted cash flow” technique and comparison with similar industry where a corporation actually exists. This presents a better result of valuation of the company and maintaining the structure of its debt and equity finance.

Solution 8

It should sell his stake, because it maintains the ratio of debt and equity, which is already giving the red signal to the corporation. Charlie Carlton needs to clear his mind about what option to opt that will be going to affect the financial health in a positive manner. It should recognize all factors which are related to economics, society, politics and technology, because these are the main condition to make a proper strength.

Solution 9

If I were the bank officer then I will analyze certain factors which are already analyzed in this case, then give the final decision for lending money. As sharing the ownership is showing the positive result and will definitely lend the money to the respective person. As this sharing is leading towards improvement of the worth of the company, I will be willing to proceed towards a partnership....................................

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